Doubts have been raised regarding the directive 2011/16/EU of February 15, 2011 on administrative cooperation in the field of taxation, which, according to organizations of lawyers and tax advisers as well as Belgian bars, would violate a number of provisions of the Charter of Fundamental Rights of the European Union and general principles of Union law.
This directive stipulates that all intermediaries and, failing that, the taxpayer, involved in potentially aggressive cross-border tax arrangements (which can notably lead to tax evasion and fraud) must declare them to the competent tax authorities.
In a ruling of July 29, 2024 (case C-623/22), the Court of Justice of the European Union first notes that the fact that the directive does not limit the obligation to declare solely to the field of corporate tax does not affect the validity of this directive concerning the principles of equal treatment and non-discrimination as well as Articles 20 and 21 of the Charter of Fundamental Rights.
It further states that the degree of precision and clarity of the terminology used in the provisions of the directive under its review does not undermine the validity of the latter concerning the principles of legal certainty and legality in criminal matters, and it similarly considers that the interference in the private life of the intermediary and the taxpayer that the obligation to declare implies is defined with sufficient precision regarding the information that this declaration must contain.
Moreover, in its ruling of December 8, 2022 (case C‑694/20), the Court had ruled that the obligation imposed on the lawyer, exempted from the obligation to declare due to professional secrecy, to notify other intermediaries involved in the tax arrangement of their own declaration obligations violated this professional secrecy.
The Court explains that the ruling of December 8, 2022 only applies to lawyers within the meaning of the directive aimed at facilitating the ongoing exercise of the profession of lawyer in a Member State other than the one where the qualification was acquired and not to other professionals who may be authorized to represent in court.
The confidentiality of the relationship between lawyer and client receives a unique protection, which is due to the distinct position of the lawyer within the judicial organization of the Member States, as well as to the fundamental mission entrusted to him and recognized by all Member States.
Finally, the Court observes that the declaration obligation, which falls on intermediaries not exempt from this obligation due to the professional secrecy to which they are bound and, failing that, on the concerned taxpayer, constitutes a proportionate and justified interference with the right to respect for private life, understood as the right of every individual to organize their private life.
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CJEU: fight against aggressive tax planning and lawyer’s professional secrecy – Legalnews, December 13, 2022
